Quantcast
Transport Airlines

Singapore Air to Shutter Flagging Low-Cost Carrier Tiger Airways

Skift Take

Is this the year of the great low-cost carrier shakeout?

— Jason Clampet

Tiger Airways Holdings Ltd., the unprofitable low-fare carrier part-owned by Singapore Airlines Ltd., said its Indonesian venture will stop flying, as the budget airline tries to restructure operations.

Mandala will cease operations from July 1, Tiger Air said in a statement to the Singapore stock exchange today. Mandala wouldn’t be able to sustain its operations and the airline’s key shareholders decided to cease funding the carrier, Tiger said in the statement. The Singapore-based budget carrier had last year increased its stake in the venture to 35.8 percent.

“Mandala’s financial results reflect the challenges that it is facing in the difficult operating environment,” Tiger Air Chief Executive Officer Lee Lik Hsin said in the statement. “The partners in Mandala have jointly come to the conclusion to cease funding the airline’s operations.”

Tiger Air is grounding planes and canceling aircraft orders as part of a restructuring after mounting losses led largest shareholder Singapore Air to name a new CEO for the low-fare airline. The restructuring efforts are symptomatic of the challenges budget airlines face in Southeast Asia, where competition among half a dozen carriers has pushed fares down.

To contact the reporter on this story: Anurag Kotoky in New Delhi at akotoky@bloomberg.net. To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net. 

More Stories Below ▼
Daily Travel Startup Watch: Vagalife, Whoop and More
Free Report: What Millennials Want in Meetings
What the On-Demand Economy Is Teaching Us About Hotel Bookings
The Rise of Personalized All-Inclusive Luxury

The Rise of Personalized All-Inclusive Luxury

Daily Travel Startup Watch: AirFit, Luxus and More
The State of Travel Media 2015
Trend Report

The State of Travel Media 2015